Anti-Money Laundering Legislation in Spain and International Money Transfers for Property Purchases in Spain: A Comprehensive Guide

Buying real estate in Spain from abroad involves more than just finding your dream home. The Spanish authorities enforce strict regulations to prevent money laundering and terrorist financing. Therefore, it is essential that all financial transactions are transparent and carried out in accordance with the law. At Seb Leeson Legal Group, we guide our clients through this process and ensure that all legal requirements are met.

Anti-Money Laundering Legislation in Spain

Money laundering involves converting illegally obtained money into seemingly legal income through complex financial transactions that conceal the origin of the money. To prevent this, Spain, in line with European and international standards, has implemented strict anti-money laundering laws. These laws require financial institutions and other parties to report suspicious transactions and verify the identity of their customers.

Mandatory Rules for International Money Transfers

When you plan to transfer money from abroad to Spain for a property purchase, there are various rules and requirements you must comply with:

  • Identity Verification:

    • You must prove your identity with a valid passport or national identity card.
    • You may also be asked for proof of your current address (such as a recent utility bill or bank statement).
  • Proof of Funds Source:

    You must demonstrate where the money comes from. This can be done through pay slips, property sales contracts, inheritance documents, or bank statements. This is often the most challenging and time-consuming part of the entire process. We will try to provide you with the necessary basic information in advance, so you understand that this is a very important, if not the most important, part of the entire process that you need to comply with:

    • Generally, you will need to submit the last three tax returns to prove you have sufficient income to support yourself. If you have a high income and it is easily demonstrable that you earn more than enough annually, it may be sufficient to prove and substantiate the investment you will make in Spain without further documentation. However, this is not commonly acceptable as a sufficient measure.
    • If you obtained the funds you will use for the purchase in Spain through inheritance: Then we need to receive the notarial deed of acceptance and distribution of the inheritance + the financial proof of the money flow. This means proof that the money from the inheritance from the notary’s or sollicitor’s account has been credited to your account and what happened with that money up to the date of transfer to Spain. The full history of the money must be proven.
    • If you obtained the funds you will use for the purchase in Spain through a gift: Then we need to receive the necessary documents to prove the donation + the financial proof of the money flow. This means proof that the money from the donor was transferred to the beneficiary (you) and what happened with that money up to the date of transfer to Spain. The full history of the money must be proven. Note! In this case, we will also need the necessary supporting documents from the donor of the money!
    • If you obtained the funds you will use for the purchase in Spain through savings: Then we need to receive the necessary proofs and certificates that can substantiate this. The full history of the money must be proven, and we will need to go back in time with more tax returns, a certificate from your current bank confirming that the funds have been in the account for a long time, etc.
    • If you obtained the funds you will use for the purchase in Spain through a loan: Then we need to receive the loan agreement with the financial institution. If you borrowed money from friends or family, we will also need to know the origin of the money they lent you (so they must also fully comply with the anti-money laundering legislation) and receive a copy of the private loan agreement + the financial proof of the money flow. The full history of the money must be proven.
    • If you obtained the funds you will use for the purchase in Spain through another method: This will become clear during our personal conversation, and we will of course help and inform you of which documents you need to provide as evidence.
  • Reporting Obligation for Large Transactions:

    • In Spain, every transaction of €10,000 or more must be reported to the relevant authorities.
    • Banks and other financial institutions are required to report suspicious activities to SEPBLAC, the Spanish anti-money laundering authority.

As you can see, there is much more involved than simply transferring money. We will handle this part of the purchase process very intensively with you, as there is shared responsibility. You must provide and have the necessary documents, and it is our job to facilitate this but also to review and control it; otherwise, you cannot use our client account.

Role of Seb Leeson Legal Group

At Seb Leeson Legal Group, we help our clients understand and comply with these complex regulations. Our services include:

  • Advice and guidance: We advise you on the required documentation and help collect and submit all necessary documents.

  • Communication with banks and authorities: We liaise with your bank and the relevant Spanish authorities to ensure the transfer goes smoothly and complies with all legal requirements.

  • Legal Support in property purchase: In addition to handling the financial aspects, we provide comprehensive legal support for your property purchase in Spain, including reviewing contracts and arranging the transfer of ownership.

Anti-Money Laundering Legislation in Spain, Tips

Important tips for our clients to comply with anti-money laundering legislation in Spain:

  • Start Early with Document Collection: It can take some time to gather all the necessary documents. Start early to avoid delays.

  • Be Transparent: Transparency about the origin of your money is crucial. Do not hide any information, as this can lead to legal complications. You can tell us everything in a personal conversation so that we can help you to be in compliance and ensure that this process goes smoothly.

  • Consult a Specialist: Always engage a legal specialist, such as our office, to ensure you meet all requirements and to make the process run smoothly.

Conclusion on Anti-Money Laundering Legislation in Spain

Complying with anti-money laundering legislation in Spain for international money transfers to Spain for property purchases is crucial. At Seb Leeson Legal Group, we are ready to guide you through this process and ensure everything is in accordance with the law. By leveraging our expertise and experience, you can buy your dream home in Spain with peace of mind, knowing that all financial and legal aspects are in good hands.

Contact us today for a non-binding conversation and discover how we can assist you in making your dream of owning a property in Spain a reality.

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